Getting China Right

Michael Wesley
29 Sept, 2009

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Introduction by Hans Hendrischke, Professor of Chinese Political Economy and Director of the Confucius Institute, University of Sydney.

Australia has entered uncharted territory. For the first time in our history, our most significant trading partner is not a member of our alliance system. Our most important trading partner is our closest ally’s strategic competitor. And our most important trading partner is not a democracy.

Australian governments of both sides have agreed that three considerations should drive our foreign policy: our security, our prosperity, and our values. With the growing centrality of China to our international affairs, each of the three underpinnings of our foreign policy points in different and contradictory directions.

We have traditionally identified our security with the stability and prosperity of our region and the world system in general; and these are goals that Beijing often speaks of also. But we would prefer that the United States be the main guarantor of regional and global security – a preference with which the Chinese disagree. When push comes to shove, our security preferences are going to be different from Beijing’s.

Our prosperity, however, demands that we are attentive to China’s economic wishes. For the decades to come, the demand in China and other large developing countries for our resources, energy and education exports will provide a vital buoyancy for our economy. But even our prosperity interests in relation to China are more complex on closer inspection. Beijing has a preference for acquiring equity stakes in resource producers in the interests of price stability and long-term supply security. Many of the companies doing the buying are state-owned enterprises, and Australians are uncomfortable about selling to interests linked to the Chinese state.

Our values are also likely to be challenged by China. Beijing’s neuralgia about travelling dissidents, from the Dalai Lama to Falun Gong, have shown it does not accept the validity of democratic freedoms in other countries when they are seen to cut across China’s interests. China has shown over time a willingness to manipulate bilateral relationships to discipline errant partners.

Australia can no longer muddle through its relationship with China. What is required is a fundamental re-examination of this country’s vital interests, and a clear prioritization of the values that underpin our foreign policy. We also need to develop a clear idea of how our international environment will evolve over the next decades, and where we can fit into this milieu.

Michael Wesley is the Executive Director of the Lowy Institute for International Affairs, an independent international policy think tank based in Sydney. Prior to this appointment in 2009 he was Professor of International Politics at Griffith University in Brisbane and Director of the Griffith Asia Institute.

His publications include Energy Security in Asia (2007), The Howard Paradox: Australian Diplomacy in Asia 1996-2006 (2007), and Making Australian Foreign Policy (with Allan Gyngell) (2007).